Feb. 28 (Bloomberg) -- Royal Dutch Shell Plc asked the U.S.
Supreme Court to rule that the company can’t be sued by
Nigerians seeking damages for torture and murders committed by
their government in the early 1990s.

The high court in Washington is considering whether
companies are exempt from two statutes imposing liability for
human-rights violations. Shell, Europe’s biggest oil company,
argued today that the Alien Tort Statute, which dates to 1789,
can’t be used to sue corporations. The Nigerian plaintiffs claim
there’s nothing in the law that limits liability to individuals.

“We do not urge a rule of corporate impunity here,” said
Kathleen Sullivan, a lawyer for Shell. “Corporate officers are
liable for human-rights violations and for those they direct
among their employees. There can also be suits under state law
or the domestic laws of nations. But there may not be ATS
federal common-law causes of action against corporations.”

The case, Kiobel v. Royal Dutch Petroleum Co., was filed in
2002 by 12 Nigerians claiming they were harmed by “widespread
and systematic human rights violations” committed by the regime
of the former military dictator Sani Abacha, including torture,
executions, illegal detentions and indiscriminate killings in
the Ogoni region of the Niger Delta.

‘No Claim’

Paul Hoffman, who represents the Nigerian plaintiffs,
criticized Shell’s position, arguing that “even if these
corporations had jointly operated torture centers with the
military dictatorship in Nigeria to detain, torture, and kill
all opponents of Shell’s operations in Ogoni, the victims would
have no claim.”

In a separate lawsuit argued immediately after the Kiobel
case, the court considered whether the Torture Victim Protection
Act of 1991 exempts organizations, including corporations, from
suits over torture. In that case, Asid Mohamad, a U.S. citizen,
sued the Palestinian Authority and the Palestine Liberation
Organization for the torture and death of his father, a West
Bank-born U.S. businessman.

The Nigerian plaintiffs, who sought to represent a class of
human-rights victims in their country, claimed that two Shell
units, Royal Dutch Petroleum Co. and Shell Transport and Trading
Co., aided the Nigerian government through a subsidiary in
committing human-rights abuses from 1992 to 1995. No individuals
were named in the suit.

Federal Dismissal

In 2006, a federal trial court dismissed part of the
Nigerians’ suit, upholding claims based on aiding in arbitrary
arrests, crimes against humanity and torture. The court
certified its ruling for an immediate, pretrial appeal.

A panel of the Manhattan-based appeals court ruled 2-1 that
corporations can’t be sued under the Alien Tort Statute. The two
judges in the majority said the statute doesn’t give federal
courts jurisdiction over the case, an issue that wasn’t argued
by Shell or cited by the lower court.

“The question is whether courts can expand their
jurisdiction without an act of Congress,” said Ilya Shapiro, a
lawyer for the Cato Institute, which submitted an amicus brief
supporting Shell. Other briefs backing Shell’s position were
filed by business groups, international corporations including
Coca-Cola Co. and Archer-Daniels-Midland Co., and countries such
as the Netherlands and the U.K.

‘Public-Relations Damage’

Shell, based in The Hague, claims the reasoning behind a
2004 Supreme Court ruling on the Alien Tort Statute bars the
Nigerian’s claims. Even if corporations can be sued under the
law, it doesn’t permit suits based on allegations the company
aided, rather than committed, the violations of international
law alleged by the Nigerian human-rights victims, Shell said
in its brief. The company also argues that the law doesn’t
reach to human-rights violations that take place within a
foreign country, rather than in the U.S. or at sea.

Allowing corporations to be sued would discourage
investment in third-world countries, the company also said.

“Even a meritless federal suit against a corporation can
take years to resolve and cause substantial public-relations
damage in the interim,” Shell argued in its Supreme Court
brief. “These costs in turn may lead corporations to reduce
their operations in the less-developed countries from which
these suits tend to arise, to the detriment of citizens of those
countries who benefit from foreign investment.”

The Nigerians claim that Shell helped the Nigerian military
government in its brutal repression of Ogoni protests.

‘Law-Free Zone’

Four federal appeals courts have permitted corporations to
be sued under the Alien Tort Statute, the Nigerians argue. They
also cited the post-World War II trial of 24 former executives
of I.G. Farben, the German chemical firm, on war-crimes charges
to support their claim that international law recognizes
corporate liability for human-rights violations.

“There is no special law-free zone for corporations,” the
Nigerians said in their brief.

The U.S. government, environmental and human-rights
organizations and groups of law professors, including experts on
the Nuremberg war-crimes trials, filed briefs supporting the
Nigerians’ arguments.

Peter Weiss, a retired lawyer who is a vice president of
the New York-based Center for Constitutional Rights, compared
the Kiobel case to the Supreme Court’s 2010 Citizens United
ruling, which gave corporations the same right as individuals to
spend money independently in support of political candidates.

‘A Paradox’

A ruling for Shell would create “a paradox between the
Supreme Court’s ruling that corporations can be treated as
persons for purposes of making unlimited contributions to
political campaigns, but not for the purpose of being sued for
committing human-rights violations,” Weiss said in a telephone
interview.

In the Mohamad case, several justices expressed skepticism
about the plaintiff’s argument that the Torture Victim
Protection Act, which allows victims to sue “an individual”
who commits torture or extrajudicial killing in the name of a
foreign state, was meant to include organizations, including
companies.

“So far, I think I have to say that you are on a weak
wicket,” Justice Steven Breyer told Jeffrey Fisher, Mohamad’s
lawyer.

Fisher argued that if the court allows the Kiobel case to
go forward and bars his client, it would result in foreign
torture victims having more rights in U.S. courts than U.S.
citizens.

“It would indeed be absurd to imagine Congress stepping in
and passing a statute saying, ‘if you’re an American citizen,
I’m sorry, you’re out of luck,’” Fisher told the justices.
“But if you happen to be lucky enough to be an alien and never
having tried to be a citizen in this country, go ahead and bring
the case in our courts.”